Billing System impact on ARPU
It will be no news to you, if I say, all operators across a Geo are compared using the parameter ARPU (Average Revenue Per User). The scale of ARPU is different in various geographies and any operator with subscription based business will be able to make out their position compared to that of the market with this indicator.
ARPU is the reflection of Operator's ability to market their products, increase the subscriber base and at the same time making revenues out of it. At a highlevel, various sets of parameters affect the ARPU of an operator. I would like to dig a little into the various functions an operator would have and check how and what impact would a Billing System bring to the operator's ARPU.
A quick thought tells us that Billing system can be the main source of customer satisfaction if it is error prone in a prepaid scenario and reacts fast to the changes in market scenario in a post paid case. I would love to see how the prepaid errors are proportional to the Customer Churn and impacting revenue and hence ARPU. But in theory, if the prepaid engine fails to carry the customer recharge request to success, or ends/doesn't allow the customer call even the customer has a good balance, it is a direct impact on the business and before the operator realizes, there could be a customer churn, loss of revenue and sharp decline in ARPU.
For a postpaid scenario, there could be many case studies. I can quickly think of a couple of them. If a product launched is over sold by more than 5 or 10 times beating the Operator expectations, it obviously clogs the entire BSS stack and if the billing system is not scaled enough to handle to load, there could be a potential revenue leakage leading to a lower ARPU. A second case study could be like this. In the Telecom world its all competition. How well one places his products in the market and how quick it happens is all that matters. A billing system will be expected to turn around quickly in terms of configuration of new plans and products to be launched. This will also have a direct impact on Subscriber growth and Operators revenue there by impacting the ARPU.
Do you think there is something more to this?
